When it comes to insurance, lenders have plenty of options. In fact, almost too many. We often hear of lenders that stick with the same carriers and policies year after year because they figure it’s easier than finding a new provider.
This strategy has drawbacks, though, especially since a lender’s insurance needs inevitably change over time. When they do, the same policies no longer offer adequate protection—and what seemed easy at the time suddenly becomes really expensive.
It’s true that finding the right provider for lender-placed insurance, risk management coverage and other types of insurance can be hard work. Fortunately, there’s a better way: using an insurance provider that is also a broker. Below is an explanation of why it makes sense to use an insurance broker.
1. You’ll have more choices
It’s pretty simple. With one insurance provider, you’ll always have a limited number of policies and services to choose from. With a broker, you’ll have many.
A broker’s job is to find the best coverage for your needs, spanning different insurance carriers and service providers. As an independent agent, the broker’s goal is to understand your insurance needs, identify the right coverage, bring in several different bids and let you compare them side by side.
There’s more. A good broker is staffed with experienced, licensed property and casualty insurance agents who have deep relationships with different insurance carriers and are current on all the different products and policies that are available. With such a broker, you’re even more likely to find the policies that work for your specific needs.
2. You get better value
Because they have relationships with different carriers, a broker is better able to find you the best coverage at the best price. They’ll do it at no extra cost, too. By taking the time to understand your goals and find the optimum carriers and policies, a broker can also help you significantly reduce risk and save money over time.
A good broker also keeps abreast of your needs and constantly monitors rate and policy changes to ensure you always have the best coverage possible. They can even customize policies for you when needed, so you get exactly the protection you’re seeking.
3. They’ll stick by you
The typical insurance agency will sell you an insurance policy and move onto the next sale. You may not hear from them until the next time you need insurance. A broker, on the other hand, is committed to finding you the best coverage, regardless of which company provides it. As a result, they have an incentive to ensure your needs remain met.
How does this happen? After a master policy is signed, for instance, the broker acts as a liaison between the insurance carrier and you. The broker’s dedicated client service team then works hand in hand with your team to implement your new policies and train your staff on them. For example, they’ll make sure your team is using the proper reports and understands how payments will be made.
While the benefits of using a broker are pretty obvious, the reality is there are very few brokers that specialize in lender-placed insurance. As a matter of fact, we believe IL Group is the only one.
As a broker, our team of certified insurance counselors has provided banks, lenders and servicers with every type of insurance product you can imagine for the past 30 years. We offer a wide range of additional services, too—including loan tracking, tax services, flood zone determinations, borrower verifications, cybersecurity coverage and much more.
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